Page 190 - DMGT310_ENTREPRENEURSHIP_AND_SMALL_BUSINESS_MANAGEMENT

Unit 12: HRM in Small Business

Notes
openings at the company. Then they are able to file a resume or fill out a resume form
online using the company’s resume builder programme. More importantly, the site pairs
the applicant with a volunteer friend inside the company. The friend will teach you about
Cisco, introduce you to important people, and lead you through the hiring process. The
real magic about Cisco’s Web site is that it targets passive job seekers – people who are
happy and successful at their current jobs. Cisco advertises its site at places – such as art
fairs, microbrewery festivals and other places frequented by potential employees – where
its kind of people hang out. One may even be greeted with a message: “Welcome to Cisco,
Would you like a job?” The company uses a minimum of five job interviews before
picking up the right person. The reward system is also carefully aligned with the strategy
and values of the company. Stock options are distributed generously, with a full forty per
cent of all Cisco stock options in the hands of individual employees without managerial
work!
When the growth of high-tech firms slowed down in late 1990s Cisco had to lay off nearly
10,000 employees to reduce costs and to improve profitability. Deteriorating financial
performance and related mounting layoffs have made it difficult for the company to
retain its best employees. The company’s network application called, Pathfinder, allows
Cisco employees to search for jobs in Cisco’s other units. Over 20 per cent of employees
have been able to find better jobs within Cisco using this tool. Consistently in the top ten
‘best places to work’ bracket, Cisco is able to keep its head high even in difficult market
conditions, because of its employee-friendly HR policies and practices. Of course as market
conditions change, Cisco’s human resource strategy will also need to change if it wants to
recruit and retain the best and brightest minds in the technology sector. (Various issues of
Fortune, Fast Company; www.cisco.com; Workforce etc. and ‘Cisco Systems: Acquiring
and Retaining Talent in Hypercompetitive Markets’ By Pfeffer, Jeffrey, Human Resource
Planning, September 1, 2000)

Questions
1. Explain how Cisco is able to attract the best and brightest employees, competing
with so many rivals in the technology sector.

2. What needs to be done at Cisco in order to retain talent especially on the training
and development front?
Source: Rao.V.S.P. (2010), Human Resource Management, Excel Books Pvt. Ltd.

12.6 Summary

People are the real assets of an organization. If treated well, they can take organizations to
commanding heights.

Effective use of human resources helps in exploitation of natural, physical and financial
resources in a better way.
Small businesses also need to match the talents of prospective employees with the
company’s needs.
Small business consultants strongly urge even the most modest of business enterprises to
implement and document policies regarding human resource issues.

Employees are far more likely to be productive assets to your company if they feel that
they are treated fairly.

Human Resource Development (HRD) is a positive concept in human resource management.

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